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Hello Readers,
A few weeks ago, we said to expect some bullishness and, for the most part, that is pretty much what has happened thanks to dropping oil prices. However, we still expect to see the ‘big sell off’ sometime over the next few months for the simple reason that practically all bear markets end that way. It probably hasn’t occurred, yet, because of the government’s attempts to socialize Wall Street, which its inhabitants have been all too willing to accept. The one thing that could prevent the blow-off is a sharp drop in oil to around $100/$110 per bbl., but don’t hold your breath. And yes, our Current Portfolio is basically the same as it was in the last Newsletter, which is still at its worst levels since we started publishing twelve years ago. Once again, we stress patience, because this, too, will pass.
Here are the headlines since the last Newsletter about companies in the Current Portfolio; dates in parentheses are when we first recommended them.
Hythiam (HYTM)(7/20/08). MDB Capital Group gives the stock a “buy” rating. To present at BMO Healthcare conference on August 5.
E*TRADE (ETFC)(7/20/08). Within a day or two after we posted this, the stock soared, along with most financials at the time, to a 62% gain; however, we did not close it because many of you had not read the Newsletter. Company fined $1 million by the SEC for anti-money laundering lapse. Reports a net quarterly loss of $94.6 million, which was a little more than expected.
Avigen (AVGN)(6/20/08). Recent balance sheet still looks healthy. Expands development pact with Sanochemia for AV650.
Energy Focus (EFOI)(6/5/08). Quarterly report upbeat; balance sheet still looks good.
Bridgeline Software (BLSW)(6/5/08). RedChip Visibility initiates coverage on company.
Microvision (MVIS)(5/20/08). Sets earnings call for August 5. To raise $26 million in stock sale.
GlobalScape (GSB)(5/20/08). Releases the AS2 add-on module for EFT – Enhanced File Transfer – server. CFO resigns.
Ziopharm (ZIOP)(5/5/08). Recent quarterly report shows company with about $21 million in cash/equivalents, which management says is amble into the 3rdQT of 2009. Presents safety and preliminary efficacy data from two Phase 1 studies of Indibulin at AACR confab.
Kopin (KOPN)(4/20/08). Releases quarterly numbers.
Biolase (BLTI)(4/5/08). To release 2ndQT earnings on August 7.
Rodman & Renshaw (RODM)(3/20/08). Slates earnings news for August 12. Adds new research analysts for energy and metals. Again ranked #1 investment bank in PIPE markets by Deal Volume.
ActivIdentity (ACTI)(3/5/08). 3rdQT earnings results set for August 12.
IncrediMail (MAIL)(2/20/08). Starts stock repurchase program. Note: We don’t much care for these since we feel the money would be better spent on marketing or improving operations.
Amicas (AMCS)(1/20/08). Chosen by Arcadia Radiology to improve customer service and efficiency. Slates earnings call for August 5.
Nanophase Technologies (NANX)(1/20/08). Recent numbers disappointing as company blames over-inventory conditions at several customers’ locations; balance sheet still looks okay.
Hollywood Media (HOLL)(1/5/08). Sets earnings news for August 6.
Move, Inc (MOVE)(1/5/08). Sets earnings call for August 7.
Hollis-Eden Pharmaceuticals (HEPH)(12/20/07). Starts Phase I/II clinical trial with APOTONE (HE3235) in late-stage prostate cancer patients. Commences Phase II clinical trial with TRIOLEX (HE3286) in Type-2 diabetes patients; expands sites to accelerate enrollment.
Santarus (SNTS)(11/20/07). To promote Depomed diabetes drug. Sets earnings call for August 4.
Sunesis (SNSS)(11/5/07). Earnings call set for August 7.
American Technology (ATCO)(10/5/07). Earnings call set for August 5. Receives $660,000 LRAD-X order from Maritime Expeditionary Security Force.
Wave Systems (WAVX)(9/5/07). Integrates YuMe’s ad platform into TVTonic. Gets NASDAQ non-compliance notice.
A.P. Pharma (APPA)(8/5/07). Sets earnings call for August 14.
Radcom (RDCM)(7/20/07). Although recent revenues looked good, they were below company’s expectations; balance sheet still looks okay.
Alliance Fiber Optic (AFOP)(7/20/08). Reports decent revenue numbers; balance sheet still looks strong.
Heska (HSKA)(7/5/07). Sets earnings release for August 11.
Oncolytics Biotech (ONCY)(6/5/07). Recent balance sheet still looks okay, for now.
Encorium Group (ENCO)(5/20/07). Signs additional new contracts valued at $5 million.
Hana Biosciences (HNAB)(5/5/07). Earnings call set for August 11. Let’s hope it’s upbeat because stock’s slide is making us nervous.
ECtel (ECTX)(5/5/07). Okays repurchase of up to $4 million of outstanding shares, and, again, we wish companies would put the money to better use. Earnings call set for August 5.
Ore Pharma (ORXE)(4/20/07). Sets earnings call for August 1, the day we post this Newsletter. Acquires repositioned clinical drug candidate from Roche. This one is on the “Endangered List”.
VocalTec (VOCL)(4/20/07). Receives NASDAQ non-compliance notice. Gets $9.2 million net from selling half of its patents. Names new CEO. This is on the “Endangered List”.
UQM Technologies (UQM)(2/5/07). Releases pretty upbeat quarterly report; balance sheet still looks good.
Endologix (ELGX)(1/20/07). Reports 14th consecutive quarter of domestic sales growth; balance sheet still looks good.
Neose Technologies (NTEC)(12/20/06). Earnings call slated for August 7. This is on the “Endangered List”.
Lantronix (LTRX)(12/5/06). Cuts 17% of workforce as it implements second phase of restructuring plan.
Proxim Wireless (PRXM)(11/5/06). Signs distribution pact with Moonblink. The stock is sinking like a rock and it’s making us edgy; we would like to see the newest numbers before making any final decision.
HealthStream (HSTM)(10/20/06). Although 2ndQT earnings and revenue rise, company revises total 2008 revenue downward; balance sheet still looks pretty good.
Hydrogenics (HYGS)(9/20/06). Sets earnings call for August 11.
TVI Corp (TVIN)(9/5/06). Sets earnings new for August 6. This is on the “Endangered List”.
Advanced Life Sciences (ADLS)(7/20/06). Announces collaboration with UK defense ministry on ALS-886 as a treatment for chemically-induced lung injury.
NTN Buzztime (NTN)(7/5/06). To report 2ndQT numbers on August 7. Adds three new games to their interactive schedule.
Tri-S Security (TRIS)(5/5/06). To release earnings on August 12.
ThermoGenesis (KOOL)(4/5/06). Announces ten new BioArchive System distributors.
Inventure Group (SNAK)(3/5/06). Releases some pretty decent quarterly numbers; balance sheet so-so because of debt.
MIND C.T.I. (MNDO)(2/5/06). Sets earnings call for August 13.
8×8 (EGHT)(1/20/06). Reports third consecutive quarter of net income; balance sheet still looks good. Signs agreement with Avtex to acquire iTEL Connect business subscriber data base. Packet8 Virtual Office small business phone system now available at Staples.com. Introduces Packet8 hosted key system services. Partners with Aastra Telecom to introduce plug-and-play IP phones for Packet8 business phone services.
Digital Angel (DIGA)(12/20/05). Earnings call set for August 7. This is on the “Endangered List”.
Westell (WSTL)(10/20/05). Quarterly earnings disappoint; balance sheet still looks good. Secures orders in excess of $20 from Verizon.
B.O.S. (BOSC)(1/5/05). To release earnings on August 14.
Nova Measuring (NVMI)(11/5/04). Earnings call slated for August.
Network Engines (NENG)(6/5/04). Earnings are so-so as company seems to lower expectations for rest of year; balance sheet still looks good.
TMNG Global (TMNG)(4/20/04). Earnings call set for August 7.
Our picks for this Newsletter are a small hitech listed on NASDAQ and a AMEX-listed alternative energy company.
ICAGEN, INC. (NASDAQ: ICGN) – $1.45. Twelve-month hi-low has been $2.80 – 88 cents. Based in Durham, NC, with about 65 employees, this biopharma has 48.6 million shares outstanding, $47.9 million in total current assets, $50.51 million in total assets, and $12.8 million in total liabilities, of which nearly $1 million is long-term debt. Institutional ownership is around 28%. One analyst rates the stock a “strong buy”. www.icagen.com
Sometimes you pick a stock for something as far-fetched as its “intellectual property portfolio”, among other reasons. It also helps that ICAgen, Inc. has a pretty nice-looking balance sheet.
Founded in 1992, and public for under four years, ICAgen is developing orally-administered small molecule drugs that modulate ion channel targets. Ion channels are protein structures found in virtually every cell of the human body. They span the cell membrane and regulate flow of ions, which are charged particles such as sodium, potassium, calcium and chloride, into and out of cells. There are currently 35 drugs that modulate ion channels and are marketed by third parties for multiple therapeutic indications. Key elements of ICAgen’s technology include cloning of over 300 human ion channel genes, which it believes represents substantially all of the human ion channel genome; expertise in developing high throughput screens for ion channel targets; ion channel focused libraries of over 250,000 compounds; proprietary computational chemistry methods; an extensive ion channel database, which integrates biological and chemical information about its targets and compounds; pharmacology and bioanalytic capabilities; and an extensive intellectual property portfolio consisting of nearly 55 U.S. patents and almost 40 U.S. patent applications as well as numerous foreign counterparts.
The company has identified multiple drug candidates that modulate ion channels and is conducting studies in its core areas, which include ICA-105665 that is in Phase 1 single dose escalation study in healthy volunteers for epilepsy and neuropathic pain; and Senicapoc, which is in Phase 1 multiple dose study in healthy volunteers for treating asthma. ICAgen also conducts ongoing drug discovery programs on new therapeutics for pain and inflammatory disorders. It has collaborations with Bristol-Myers Squibb, Astellas Pharma, and Pfizer.
In early July, ICAgen successfully completed the Phase 1 ascending dose clinical trial of Senicapoc and expects to initiate a Phase II proof-of-concept clinical trial in asthma during the second half of this year.
For FY2007, ending 12/31/07, revenue was $21.11 million with $10.9 million in losses. During the 1stQT of the current FY, ending 3/31/08, revenue was $2.96 million with $3.65 million in losses.
We like the fact that ICAgen is receiving some healthy investments from its collaborators, which are probably the result of its product portfolio and that appears to be impressive.
Our 24-month target for the stock is $2.50 to $3.00.
For more information, contact ICGN’s Richard Katz at 919-941-5206; rkatz@icagen.com
U.S. GEOTHERMAL, INC. (AMEX: HTM) – $2.35. Twelve-month hi-low has been $4.78 – $1.85. Based in Boise, ID, with unknown number of employees, this alternative energy company has 62 million shares outstanding, $5.45 million in total current assets, $40.36 million in total assets, and $2.47 million in total liabilities, of which $1.98 million is long-term debt. One analyst rates the stock a “strong buy”. www.usgeothermal.com
Alternative energy are the new buzzwords, and with either McCain or Obama more emphasis will be placed on new energy sources, and geothermal has been high on the “to-do” list. U.S. Geothermal, Inc. already has made some inroads and has a pretty good looking balance sheet to help it along.
Founded almost ten years ago and public since 2001, U.S. Geothermal acquires and develops geothermal resources in the Western U.S. Currently, the company operates two power plants, Raft River I in Idaho, through its joint venture with Raft River I Holdings, LLC, a subsidiary of Goldman Sachs (yes, that caught our eye, also), and a plant located in the San Emidio Desert in Nevada. HTM also has several other properties under development or exploration, most notably the Neal Hot Springs project that consists of 9.6 square miles of geothermal energy and surface rights in eastern Oregon.
As of March, the Raft River Unit I sold between 9.6 and 11.7 megawatts of power to Idaho Power Company under a net 13 megawatts power purchase agreement (PPA) which expires in 2032. In May, the company acquired the geothermal assets, including a 3.6 net megawatt nameplate generating capacity power plant, from Empire Geothermal Power LLC and Michael B. Stewart, located in Washoe County, Nevada. Then, in early July, HTM announced that the first full size production well (NHS-1) at the Neal Hot Springs Project was successfully completed and an initial flow test confirmed the presence of a geothermal reservoir.
Until recently, U.S. Geothermal had no revenue, but at the end of the 1stQT of this year the company finally had $184,000 in revenue with $1.3 million in losses.
This seems as good of an alternative energy play as any other and it appears to be making some progress on the revenue side.
Our 24-month target for the stock is $3.75 to $4.25.
For more information, contact HTM at 208-424-1030.
Look for the August 20, 2008 Newsletter to be posted on 8/18 or 8/19.
Thank you,